Physical and digital commerce health pulse check
Store owners and online merchants need to turn shopping into gaming experiences to respond to the ongoing changes in e-commerce. They also need to forget the industry hype about the wonders of personalization as a marketing strategy.
The supply chain debacle and rising costs of everything have forced consumers to make critical choices about how they spend their rapidly disappearing dollars. Retailers can no longer rely solely on personalization strategies to win or retain customers.
Once considered the holy grail of creating differentiated shopping experiences, personalization remains elusive for many retailers because it’s an imprecise approach to doing well and the marketing space is ever-changing, according to Kerri Drozd, senior vice president for strategy at Hero Digital, a San Francisco-based customer experience company.
“Previously, personalization meant using a customer’s name in communications, in sign-in experiences, or in brand rewards programs. Of course, in 2018, it may have been a great added value for customers. However, in 2022, each brand has these basics. To stand out, brands need to do things differently,” she told the E-Commerce Times.
Next Level Tech Tactics
To stay afloat in rising economic waters, marketers need to embrace recent trends in gamification, augmented reality (AR), and conversational artificial intelligence (AI) technologies.
Retailers and brands are leaning into these apps and techniques as a way to spend more time with customers to build brand affinity and learn more about them along the way, she proposed. For consumer brands, gamification is about harnessing human motivation to change behavior.
“It encourages people to engage with your business in new ways that can ultimately create value for customers and brands,” Drozd said.
Augmented reality, on the other hand, helps connect the physical and digital dimensions – and it could well become critical in the near future for any brand looking to make online sales by allowing consumers to virtually try on their products before making a purchase. purchase, she added.
Conversational AI technologies are growing in popularity as technology evolves. They enable next-level personalization even for unknown customers by using profile data, behaviors and lookalikes of past customers, Drozd explained.
What customers really want
Providing customers with a personalized experience, whether in-store or online, is not the negotiation strategy marketers are led to believe. Basic personalization actually ranks very low on the list of experience attributes that are important to them, according to consumer surveys conducted by Hero Digital.
Yet, providing customers with personalized experiences, both in-store and online, is extremely important. In fact, two-thirds of consumers expect companies to understand their individual expectations and needs. This number will only increase over time, according to Drozd.
What matters most to today’s consumer are meaningful and relevant interactions. This means knowing where, when, and how a consumer has historically and recently engaged with the brand – and what their current intent is.
“Contextualization moves brands beyond personalization. It is becoming more and more advanced as brands connect zero, first, second, third party and big data across silos,” Drozd said.
Businesses need to go further to consider both a customer’s online behavior and their offline behavior to enable a personalized experience no matter where they shop, she noted. .
Change of hours
U.S. retail sales fell in May for the first time in five months, dampened by a plunge in purchases of automobiles and other big-ticket items, according to a June 15 report from Bloomberg. The shift in buyer behavior suggests a moderation in demand for goods amid decades of high inflation. The figures suggest that Americans’ demand for goods is weakening due to worsening inflation.
Granted, retailers expect sales numbers to decline for at least the rest of 2022. However, that doesn’t mean brands should just take the next six months or so.
“On the contrary, maintaining existing relationships is more important than ever. By engaging loyal customers, you can ensure that they will buy from you again once they are able and feel comfortable doing so financially,” observed Drozd.
E-commerce sales have skyrocketed due to the pandemic. Until recently, projections predicted that sales were likely to remain at these record highs, or even increase, for years to come. Even at those records, more than four-fifths of all retail sales took place in physical stores.
Despite difficult economic conditions, retailers still have the opportunity to make sales. Pent-up demand and pent-up social energy are driving people out and into the stores.
“The physical and digital pendulum will continue to swing back and forth, and it’s important that brands stay as close to the customer as possible. Understanding shopping occasions and context can help brands design experiences tailored to their purpose,” Drozd recommended.
How can in-store and online retailers survive?
Cheaper may be the best option for most Americans when shopping in 2022. With consumers less likely to shop in the coming months, now is the time for retailers to fix the basics of what’s broken. .
Retailers, both in-store and online, need to remember that customer loyalty is more vital than ever. It’s important to invest in a positive customer experience, according to Drozd.
When you have thousands of loyalty rewards members, for example, there is already an incentive to buy exclusively from a preferred merchant. Coupons are more valuable when consumers collectively budget.
“However, consumers find it harder to engage in loyalty programs for brands they don’t typically buy. So offering more than just rewards points and getting the right messages to consumers in the right place and timing is key to breaking through the ever-increasing market noise,” Drozd suggested.
One approach retailers can take is to leverage their customer data using a customer data platform (CDP) to better understand changing preferences.
According to Sameer Patel, director of marketing and solutions at SAP CX, these platforms uncover critical insights that provide businesses with reliable, relevant and actionable data on how to engage with customers at every in-person and digital touchpoint. .
This provides businesses with powerful data to experiment with new engagement models, quickly pivot to new business models, deliver unique value to customers, build loyalty, and achieve business and financial goals.
But the majority of CDP usage today is for marketing and advertising use cases, rather than driving overall performance across the business.
“We see an opportunity not only to leverage actionable customer data to drive marketing success, but across the entire customer experience, sales, service, commerce, loyalty, and more.” he told the E-Commerce Times.
Patel also sees a chance to leverage CDP as an enabling technology. Ultimately, it can connect the back-end of business processes for those trapped in enterprise resource planning or ERP systems to the front-end of engagement, across all customer touchpoints. .
By combining data from front-office and back-office sources, companies gain access to holistic customer profiles that provide deeper customer understanding, actionable insights and predictive actions, Patel explained.
Using a CDP increases revenue, increases customer conversion, retention and loyalty, and increases growth while reducing pressure on IT resources.
“That’s what we consider a corporate CDP,” he said.
Helps physical stores and retailers
Data is important for all sizes and types of businesses, whether it’s bricks and mortar or e-commerce. Brick-and-mortar SMEs face stiff competition and a landscape where every dollar and data point counts.
“With a unified data model, retailers will have a more complete understanding of their customers and have more agility to respond to changing behaviors and economic conditions,” Patel said.
For example, CDP offers the ability to provide a true lifetime value score based on profitability, rather than simply buying data. It also provides a way to prioritize segments based on customer profitability.
CDP may also impact online retailers. For example, iconic clothing brand Carhartt recently transformed its entire back office to better meet the needs of digital native consumers.
At the heart of Carhartt’s strategy was its investment in digital technologies that deeply connect data across the enterprise to power highly personalized omnichannel engagement. This has helped the company ensure that the entire value chain – from e-commerce site to manufacturing floor – is optimized to deliver what customers want, when and how they want it, according to Patel.
Fight rising inflation
Due to rising inflation, consumers are already changing their shopping habits, he noted, referring to a drop in retail sales in May. As customers begin to cut spending, it’s more important than ever for businesses to deliver exceptional customer experiences and adapt to meet changing customer expectations.
“Consumers will become even more selective about where they choose to spend their money, so brands that don’t optimize for CX won’t thrive,” he observed.